“Paying Under The Table”? Well, This Is For You.
I know how it goes. Everyone will get behind on something once in a while… but has that ever been procrastinating “getting official” with your paid workers? Well, I can say I have known quite a few clients in my past that definitely flirted the line of “casual wages” or “consultants”. And if your workers meet the criteria, that’s 100% fine! But, on the chance that this finds you and you fall under the “I don’t know what’s right but I have always done it this way” you may get reviewed by the Canada Revenue Agency sooner than later. I hope to help you there.
The Canada Revenue Agency is NOT forgiving. If they think you’ve been paying people “under the table” they have no sympathy. So, best to be sure that you are doing things right. There is a list provided by the CRA, which I will provide in my references. But it breaks down to these crucial questions.
Does the worker bring their own expertise and tools to every workday or jobsite?
Does the worker determine their own hours, or is that dictated by you as the person paying their bill? Are they even providing you with bills?
Does the worker determine the best way to complete the tasks asked of them, or do you need to be there to dictate the path forward?
If you just thought anything along the lines of “Hmm. I really don’t know if I can answer these questions” or “No way, I need to be in control” that is a danger flag. You are most likely to be assessed as an employer if you or a worker asked for a Ruling from the CRA. This is not where you want to be.
If doing business this way has been your normal, I highly recommend you think about registering for a payroll account, getting employment contracts, and possibly hiring some help for managing the extra paperwork that comes with following proper payroll rules and regulations. Especially if you’re reading this with panic in your heart. People like me can handle that part for you with the appropriate authorization.
It is very important to note that YES, you will be at risk of a payroll remittance review if you try and “correct” your ways and open a payroll remittance account. But, that risk comes earlier than if you continue down the “under the table” path alone. It is always better to get onside as soon as you notice that you’re not. This is for all businesses, and you will breathe easier knowing you’re on the right path and another review shouldn’t be coming down the pipeline. You will also be doing right by your employees, who will suddenly gain access to CPP, EI, and WCB.
Have questions? I am happy to have a FREE and CONFIDENTIAL 15 minute call if this resonated with you, and you may need help. It would be my pleasure to help you prevent any CRA findings from being too harsh. Let me know!